Australian specialist real estate financier MaxCap Group is setting up operations in New Zealand in a joint venture with Bayley Corporation and investment advisory firm Forsyth Barr.
The Melbourne company has opened an office in Auckland with Bayleys and Forsyth Barr, between them owning 50 per cent of MaxCap NZ.
"Our objective is to become New Zealand's premier non-bank commercial real estate lender focusing particularly on property development projects as well as investment funding," says Brae Sokolski, MaxCap's co-founder and chief investment officer.
MaxCap Group specialises in commercial real estate debt funding and has o managed about A$7.8 billion (NZ$8.2b) worth of loans since it was established 13 years ago, says Sokolski. It has about A$4.1 billion (NZ$4.3b) of funds under management.
"We obtain and actively manage the funds to provide finance via a variety of sources. These range from high net worth individuals through to large institutional investors, including major superannuation and pension funds," says Sokolski.
"Bayleys will be assisting us with lending opportunities through its far-reaching network and client base across New Zealand.
"We will also be looking to access Kiwi currency funding sources, focusing initially on high net worth private investors utilising Forsyth Barr's expertise and experience in wealth management.
"The drop in the Official Cash Rate (OCR) to one per cent and the flow-on effect this has on bank deposit rates means our New Zealand managed funds are likely to have increased appeal to experienced investors searching for a higher level of return."
Bayleys' managing director Mike Bayley says the company's involvement in the joint venture has been driven by limitations on commercial property funding from retail banks.
"These limitations are, at times, having a negative effect on market activity and are a source of frustration for clients, particularly developers who play a vital role in creating new leasing and investment opportunities.
"It has prompted us to look for alternative sources of funding for clients. MaxCap NZ will be taking a relatively conservative approach but it will offer more flexibility and consider more complex deals."
Jonty Edgar, co-head of markets for Forsyth Barr, says MaxCap Group will provide the firm's clients with more investment options.
"We have been looking to diversify our offerings in the property sector, driven by private investor demand for alternative investments with higher yields and attractive risk-reward dynamics. This joint venture enables us to do that," says Edgar.
"MaxCap has a well-established track record in Australia for their rigorous approach to risk management. They have a history of returning full principal and interest to investors and delivering on terms issued to borrowers."
Mark Farrands has been appointed chief investment officer for MaxCap NZ. He has over 27 years' finance and valuations experience and was previously Auckland r manager, property finance at ASB Bank.
He says MaxCap NZ's initial focus is on financing $3 million-plus property transactions with negotiations already well advanced on funding for land development deals in Auckland and Queenstown.
MaxCap Group will be bringing a group of Australian developers to New Zealand in mid September.